What happened: Supermicro (SMCI) stock jumped 18% in after-hours trading on Tuesday.

What's behind the move: The AI server maker announced it expects gross margins to nearly double as it works through a record order backlog in the coming quarters.

"Backlog rose to record levels at the end of fiscal 2026 with total new orders in excess of $60 billion received during the fourth quarter of fiscal 2026," said the company in its business update.

Supermicro said it expects its gross margin to be in the range of 15% to 17%, significantly higher than the company's prior guidance of 8.2% to 8.4%, "primarily due to a favorable customer and product mix."

What else you need to know: Supermicro designs and builds servers and data center systems that incorporate semiconductors from chipmakers like Nvidia (NVDA), Intel (INTEL), and AMD (AMD).

Last month, Supermicro CEO Charles Liang congratulated Elon Musk for SpaceX's IPO, revealing that the company was co-building "another new Gigawatt AI datacenter for @SpaceX and @XAI within a year!"

More from Yahoo Scout What explains Supermicro's volatile stock performance this year? How significant is Supermicro's $60 billion order backlog? Why are Supermicro's gross margins expected to double? What drove Supermicro's 18% after-hours stock jump?

Despite the AI boom, the stock has had a volatile ride in recent months.

Year to date, shares are down 12% after tumbling in June following an announcement of an equity raise to purchase components to fulfill $39 billion in AI server orders.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

Click here for in-depth analysis of the latest stock market news and events moving stock prices

Read the latest financial and business news from Yahoo Finance